Amazon already testing smartphone with 4in plus display

Sources within companies that supply parts for Amazon’s forthcoming smartphone – possibly sold under the Kindle brand – have confirmed that the online retaier has already started to test the product and that its mass production will begin either late this year or early next year.

Days after a similar Bloomberg report, the Wall Street Journal reports that the smartphone being tested has a display between 4in and 5in. The device will face some very tough competition in the Android market with the likes of the Samsung Galaxy family, a raft of affordable devices from ZTE and Huawei plus a resurgent Sony Mobile likely to make Amazon’s venture tricky.

And we’re not even factoring in compeition from Apple and Microsoft with their iOS and Windows Phone platforms. Amazon is likely to use the same formula as it did for the popular Kindle Fire. Sell the hardware with a razor slim margin and hope that customers will use it as a conduit to buy content (music, eBooks, videos etc) where margins are higher.

We expect Amazon to ship both the smartphone and the next generation Amazon Kindle Fire tablet(s) with the same underlying hardware (except for the display). With a 1,024 x 600 resolution (like the Orange San Diego), a dual-core processor, 1GB of RAM and a customised version of Android 4.0 Ice Cream Sandwich.